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Friday, January 04, 2013

Ind. Courts - "Skadden attorneys may face sanctions for failing to cite Wigod in TPP case"

Recall this March 11, 2012 ILB entry, headed "7th Circuit gives Chicago homeowner OK to sue lender over HAMP denial." The focus was a March 7, 2012 7th Circuit opinion by Judge Hamilton, Lori Wigod v. Wells Fargo Bank. From the Chicago Tribune story: "The ruling is likely to send shivers through the banking industry, which up until now has largely been shielded from HAMP-related lawsuits."

This afternoon I received a copy of an email originating with the National Housing Law Project, forwarded by IU McKinney Law Professor Florence Wagman Roisman to faculty members, and enclosing a copy of Jan. 2, 2013 ruling by Judge Matthew F. Kennelly, ND Ill., Eastern Div., in the case of Thul v. OneWest Bank. Prof. Roisman's message: "This should be of interest to all with regard to professional responsibility." From the opinion:

This argument flies in the face of a recent and controlling Seventh Circuit decision that OneWest did not bother to address or even mention until after the Thuls cited it in their response to the motion to dismiss: Wigod v. Wells Fargo Bank, N.A., 673 F.3d 547 (7th Cir. 2012). The Seventh Circuit squarely rejected in Wigod the argument that OneWest makes here. Id. at 561-65. The same discussion in Wigod also dooms OneWest’s argument that there is no sufficiently unambiguous promise to give rise to a viable promissory estoppel claim. The Seventh Circuit also rejected in Wigod the defendant’s argument, likewise repeated by OneWest in its motion to dismiss, that a plaintiff may not pursue a promissory estoppel claim where a claim for breach of a written contract claim has also been alleged. Id. at 566 n.8.

The attorneys who submitted OneWest’s opening brief, John Beisner and Jessica Miller of the Washington, D.C. office of Skadden, Arps, Slate, Meagher & Flom, LLP, and Andrew Fuchs of the Chicago office of that firm, ought to have brought Wigod to the Court’s attention in their opening brief. Their failure to do so almost certainly ran afoul of their obligation of candor under ABA Model Rule of Professional Conduct 3.3(a)(2) and the corresponding District of Columbia (D.C. RPC 3.3(a)(3)) and Illinois rules (Ill. RPC 3.3(a)(2)), and it likely amounted to conduct sanctionable under Federal Rule of Civil Procedure 11(b)(2) and 28 U.S.C. § 1927. The Court will address this point further at the end of this decision. * * *

For the reasons stated above, the Court denies defendant’s motion to dismiss [docket no. 29]. The Court also directs each of the attorneys who submitted the motion to dismiss and supporting briefs, John Beisner, Jessica Miller, and Andrew Fuchs of the law firm of Skadden, Arps, Slate, Meagher & Flom, LLP, to show cause in writing, by no later than January 10, 2013, why they should not be sanctioned in one or more of the following ways: (a) payment of plaintiffs’ reasonable attorney’s fees and expenses caused by advancing arguments contrary to the Seventh Circuit’s Wigod decision without bringing that case to the Court’s attention; (b) revocation of the pro hac vice status of Mr. Beisner and Ms. Miller; (c) a written and/or oral reprimand; (d) any other sanction that may be appropriate. The ruling date of January 3, 2013 is vacated. The case is set for a status hearing in open court on January 17, 2013 at 9:30 a.m. Mr. Beisner, Ms. Miller, and Mr. Fuchs are all directed to appear in person.

Prof. Joel Schumm, who forwarded the information to the ILB, recalls that Indiana had what appears to be a somewhat similar case, albeit with a different outcome - see this June 22, 2010 ILB entry headed "Supreme Court agrees with hearing officer that attorney who cited vacated opinion did not engage in professional misconduct."

Posted by Marcia Oddi on January 4, 2013 05:17 PM
Posted to Ind. (7th Cir.) Decisions | Ind. Sup.Ct. Decisions | Indiana Courts